Don't think that the U.S. and Iran are done butting heads

Jan. 19, 2016 3 AM PT

reporting from Washington — The glow of goodwill that followed a surprise prisoner swap and the lifting of international sanctions on Iran’s nuclear program over the weekend is already being tempered by the somber realization that the Islamic Republic is not likely to change course significantly on other pressing conflicts with the West.

Recent events marked an improvement in relations between Washington and Tehran after decades of open hostilities, and a victory, if only a temporary one, for moderates in Iran.

For the first time, there is an open diplomatic channel through which the two countries can communicate, and an especially personal one between Secretary of State John F. Kerry and his Iranian counterpart, Foreign Minister Mohammad Javad Zarif. They are said to be on a first-name basis, speaking almost daily by telephone and more frequently when there are fires to put out.

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But it is highly unlikely that the momentum on the nuclear agreement will translate into substantial foreign-policy shifts for Iran, particularly when it comes to other intractable conflicts in the region, U.S. officials say. The two countries remain worlds apart on numerous issues, and that chasm will not be bridged easily.

The first test comes Jan. 25 when world powers are scheduled to resume talks aimed at ending the civil war in Syria. Iran steadfastly backs Syrian President Bashar Assad, putting it squarely on the opposite side of the U.S., Saudi Arabia and most of the West.

Obama administration officials say they are keeping expectations low.

“Iran is not going to change dramatically in the next year or two years,” said a senior administration official who was not authorized to speak publicly. “If Iran does act in a more constructive fashion, it would be a positive development in resolving difficult issues. If they don’t, we will continue to enforce our sanctions and continue to have very strong differences.”

Critics of the nuclear deal predict that, with tens of billions of dollars about to pour into its coffers because of the agreement, Iran may further antagonize the West by using that money to finance terrorism and pro-Assad military operations.

“The changes in Iranian behavior that we have seen are tied to the fact they wanted the $100 billion,” Dennis Ross, a former longtime Middle East negotiator and now counselor at the Washington Institute for Near East Policy, said in an interview. He was referring to the frozen Iranian assets released by sanctions relief; the exact amount of those monies is unclear.

“If you are looking for signs of potential change in Syria or Iraq, you won’t see it anytime soon,” Ross added. “The resistance ideology — as represented by the supreme leader and the [hard-line] Revolutionary Guard — is not going to change.”

The Obama administration’s decision to place new sanctions on Iran on Sunday, targeting 11 people and companies involved in that country’s ballistic missile program, angered the government in Tehran. The new sanctions, a response to Iran’s launch of ballistic missiles last fall in apparent contravention of United Nations resolutions, are separate from those related to Iran’s nuclear program. They were announced shortly after three freed American prisoners, returning homeward, cleared Iranian airspace.

Iranian officials denounced the latest sanctions, saying they “have no legal or moral legitimacy,” according to a Reuters report Monday of a Foreign Ministry statement. The hard-line newspaper Kayhan ran a banner headline — “Sanctions are back!” — nearly crowding out coverage of a celebratory speech by moderate Iranian President Hassan Rouhani.

“Not only did Obama make a somewhat insulting speech to the Iranian people just hours after implementation of the nuclear agreement, but the U.S. then went and imposed these new sanctions,” said Professor Mohammad Marandi, an expert on American affairs at Tehran University whose views often reflect official Iranian policy. “How does the United States expect that to be interpreted in Iran?”

Changes in how Washington will now deal with Tehran are significant, but not profound, said Wendy Sherman, the longtime senior State Department official who led the team negotiating the nuclear deal.

Iran foments instability in the Middle East, has been a state sponsor of terrorism, and its human rights record is terrible. So we have a long way to go.

— Wendy Sherman, a longtime senior State Department official

“Iran foments instability in the Middle East, has been a state sponsor of terrorism, and its human rights record is terrible,” Sherman, now a senior fellow at Harvard University’s Belfer Center for Science and International Affairs, said Monday, speaking to NPR from Tel Aviv. “So we have a long way to go.”

Another factor rests with how much influence Rouhani will continue to wield, especially if economic gains from sanctions relief prove more modest than promised, as is likely given the historically low price of oil. Iran is also being allowed to rejoin the international banking system as part of the relief.

Rouhani may not have as free a hand to maneuver as he and his moderate supporters had wanted. He ran for president in part with a promise to solve Iran’s daunting economic problems by securing sanctions relief.

He has delivered on the relief, but the economy is in such a deep hole, analysts say, that it may not grow by more than 2% or 3% this year, far below what many Iranians had hoped for. Rouhani may not get the political bounce he no doubt believes he deserves.

The first chance to gauge Rouhani’s position will come in parliamentary elections next month; it will be crucial that Rouhani supporters and other so-called pragmatists are not disqualified from running.

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It is clear that Rouhani in recent months has received the blessing of supreme leader Ayatollah Ali Khamenei. Without Khamenei’s blessing, the deal would not have been negotiated for more than a year, signed over the summer and implemented this past weekend. Nor would the five American prisoners, including Washington Post reporter Jason Rezaian, have been released.

Khamenei initially prohibited talks with the Americans on any matter other than the nuclear program. But about 14 months ago, U.S. officials noted an apparent opening for discussion of the release of Rezaian and other imprisoned Iranian Americans. A separate venue for that negotiation was opened, now with participation for the first time of intelligence officials who were the true arbiters of the fates of the American prisoners.

There were moments in the negotiations when the U.S. delegation thought it had reached agreement on certain points, only to find the Iranians returning to the table nixing it, apparently after consultation with the intelligence community or other hard-liners, Sherman recalled.

Under Khamenei’s direction, or push, hard-liners and moderates apparently came to the same page for the nuclear deal and prisoner swap. But it is likely to be a one-off, many analysts believe. Since the 1979 Islamic Revolution in Iran, there have been occasional periods of opening-up and expectation, such as the often-giddy electoral demonstrations in 2009 that were followed only by crackdown and retrenchment.

Another obstacle to rapid change and closer ties is the fact that it will be difficult for Western businesses to go charging into Iran. There are numerous risks for any potential entrepreneur; U.S. citizens, for example, would still be barred from doing business with Iranian partners tied to terrorism or human rights abuses.

Many Iranian businesses are fronts for the Revolutionary Guard, so an unsuspecting prospective company risks running aground of the sanctions that are still in place, or “snap-back” sanctions that will be imposed by the U.S. or the international community if Iran violates any of the nuclear restrictions.

Money laundering is also a large industry in Iran. International monitors have placed Iran in a special category with North Korea in terms of the illegal movement and laundering of money. Several of the Iranians freed by the U.S. as part of the prisoner swap had been convicted of or faced trial on money-laundering charges.

Crippled banks and a mysterious legal system are also a deterrent. If Iran truly wants integration into the global market and financial system, it will have to play by the rules, Ross said; otherwise, “it will pay a price.”

Still, some multinational conglomerates are eager to get started. Daimler announced Monday that its truck business is returning to Iran. The German company started building trucks in Iran in 1953, stopping only in 2010 because of the nuclear-related sanctions. Daimler estimates Iran needs to replace 56,000 commercial vehicles over the next three to five years.

“We plan to quickly resume our business activities in the market there,” Daimler Trucks head Wolfgang Bernhard said in a statement.

Iran has also announced the purchase of 100 Airbus planes from Europe.

Rouhani tweeted over the weekend: “The legs of Iran’s economy are now free of the chains of sanctions, and it’s time to build and grow.”